http://seekingalpha.com/article/1756702-top-performing-biotech-st...

http://seekingalpha.com/article/1756702-top-performing-biotech-stocks-in-2013-worthy-of-your-attention?source=yahoo


SUNSHINE HEART

While trying to discover more leaders, I would like to introduce to you another top stock performer for 2013 (up +80% YTD).

Significant Market Potential Is Sited Here

Sunshine Heart was founded in November 1999 and is headquartered in Eden Prairie, MN and is an early stage medical device company, which develops innovative technologies for cardiac and coronary disease. It is focused on developing, manufacturing and commercializing the C-Pulse System for treatment of Class III and ambulatory Class IV heart failure. Sunshine Heart has completed an approved U.S. Food and Drug Administration (FDA) feasibility clinical trial of the C-Pulse System and presented the results in November 2011. In March 2012, the FDA notified the Company that it could move forward with an investigational device exemption (IDE) application. Sunshine Heart received unconditional approval from the FDA in November 2012 to initiate its pivotal trial. In July 2012 Sunshine Heart received CE Mark approval for its C-Pulse System in Europe.

An Unmet Need Is Present

First, The U.S. and Europe Long-Term Outlook Looks Promising

Given that the company is in the early stage of development, it is nevertheless expected that meaningful procedural volume will build in Europe on the C-Pulse's continued expansion in the key European markets, as well as, introductions to the U.S. market. European expansion could to drive significant growth in the next few years along with the U.S. FDA approval of the C-Pulse System in a few years. This marks a pivotal event in the top line trajectory for the company.

Second, research suggests that there are roughly 1.5M NYHA Class III and ambulatory Class IV heart failure patients in the U.S., or roughly 25-30% of the overall U.S. heart failure population. A key inclusion criterion of SSH's U.S. pivotal trial is heart failure (HF) patients with left ventricular ejection fraction (LVEF) of = 35%.

The analysis of a large scale heart failure trial conducted to examine the effect of a mainstream heart failure drug on mortality and hospitalization in stable patients with HF analysis (the Digitalis Investigation Group trial) found that of the 7,788 stable, but clinically confirmed HF patients screened for the trial, 66% had LVEF of =35%.

If one were to take this 66% theory to the broader population of 1.5M moderate heart failure patients, the results would conclude that there very well might be close to 1M patients in the U.S. likely to be eligible for the trial under the LVEF inclusion criterion. Here's the math. (1.5M x 66 = 990K).

I believe that within this market, SSH's realistic target population will be those patients moving towards advanced Class IV heart failure.

Taking a conservative estimate of 130,000 patients in the U.S. who are experiencing severe heart failure may represent the ideal target group and if successfully reached at a cost of $59K per device, the estimates total a significant market opportunity of $7.5B in the U.S. alone, and we are not even counting Europe.

Now, by applying similar estimates of 66% to Europe's estimated 3.7M patients in Class III/ambulatory Class IV heart failure implies "the math" further indicates a multitude of patients in Europe who would ideally become very good candidates for the C-Pulse system.

A Game Changer In The Making?

Remember that science and breakthrough technologies in medical advances do take time. While this may be a few years off, fully implantable heart assist devices is something out on the horizon, but could very well be achieved by SSH. I think that this is the real "goal". One should also note that this has not yet been achievable by either Heartware (HTWR) or Thoratec (THOR) who have invested several costly years into its R&D.

Sunshine Heart, Inc. Closes Public Offering of Common Shares

On September 24, 2013 -- Sunshine Heart, Inc. announced the closing of its previously announced underwritten public offering of 4,381,500 shares of its common stock, which includes the full over allotment of 571,500 shares, at a price to the public of $10.50 per share. The net proceeds from the sale of shares by Sunshine Heart, after underwriting discounts and other offering expenses, totaled approximately $42.6 million.

The TCT Presentation Is Pending

By the way, European trial data is expected to be released soon and if positive, (which I believe it will be) this stock may see a big move almost immediately. If not, then the shares will experience a setback, but the my inclination says that we go higher from here as suggested by the run up into the TCT conference that will be held on October 27 - November 1, 2013 in San Francisco. The session that SSH will be attending is on October 28 called: Device-Based Approaches for Heart Failure: Recent Developments and New Directions -- Session III: LVADs for "Less Sick Patients" and presented at 10:39 am PST by Dr. Schmitto.

Please see its corporate presentation for more and watch this one closely.